Show captionJair Bolsonaro: ‘I can’t control it if an entrepreneur who is friendly to me is doing this. I know it’s against the law. But I can’t control it.’ Photograph: Mauro Pimentel/AFP/Getty Images

The far-right frontrunner in Brazil’s bitterly contested election has been accused of benefiting from an undemocratic and criminal industry of fake news and lies in his attempt to become the country’s next president.

Polls suggest Jair Bolsonaro, a pro-torture, dictatorship-praising populist, is heading for a landslide victory over his leftist Workers’ party (PT) rival, Fernando Haddad, on 28 October with about 59% of intended votes compared with his rival’s 41%.

But according to allegations in a front-page report by the Folha de São Paulo, one of Brazil’s leading newspapers, Bolsonaro has been getting an illegal helping hand from a group of Brazilian entrepreneurs who are bankrolling a campaign to bombard WhatsApp users with fake news about Haddad.

The newspaper claimed the multimillion-dollar “anti-Workers’ party campaign” was designed to inundate Brazilian voters with untruths and inventions, by simultaneously firing off hundreds of millions of WhatsApp messages.

In some cases overseas numbers were used to get around the platform’s spam controls.

“The practice is illegal since it constitutes undeclared campaign donations by companies, something outlawed by electoral legislation,” the newspaper said.

“What we are facing here is an attempt at electoral fraud,” he added, claiming to have information suggesting 156 entrepreneurs were involved in the campaign.

At a press conference in São Paulo, Haddad told reporters he would not rest until there was a “blow by blow” account of “everyone who put dirty money into this defamation campaign”.

“The business people who have become involved in this will have to pay judicially – and we already know about several who have taken part,” he said, adding that he believed there was already enough evidence for arrests to be ordered.

In a statement, the PT said it had asked Brazil’s federal police to investigate Bolsonaro’s “industry of lies”.

“Jair Bolsonaro’s criminal methods are intolerable in a democracy,” the party’s national executive committee said.

The PT said messaging apps and social networks needed to act against misinformation or become accomplices in “the manipulation of millions of users”: “What is at stake here is the survival of the democratic process.”

Bolsonaro’s campaign hit back, with his son, Carlos, dismissing the allegations on Twitter as “half-truths” and “decontextualized lies” that reflected the PT’s “despair” at his father’s imminent victory.

Bolsonaro told the rightwing website O Antagonista: “I can’t control it if an entrepreneur who is friendly to me is doing this. I know it’s against the law. But I can’t control it, I have no way of knowing about it and taking measures [to stop it].”

Observers of what some call the most important election in Brazilian history have expressed growing concern over the impact that fake news – much of it favouring Bolsonaro – is having on the race.

Much of it is being broadcast via WhatsApp – a hard-to-monitor Facebook-owned messaging app which, with about 120 million active users, is wildly popular in Brazil.

Writing in the New York Times this week, the authors of a report on the role of misinformation in Brazil’s election urged WhatsApp to take urgent steps “to reduce the poisoning of Brazilian political life” by false or distorted news.

A Whatapp spokesperson said: “WhatsApp has proactively banned hundreds of thousands of accounts during the Brazilian election period. We have best-in-class spam detection technology that spots accounts that engage in abnormal or automated behavior so they can’t be used to spread spam or misinformation.”

One of the most outlandish lies being peddled involves the bogus claim that, as São Paulo’s mayor, Haddad equipped schools with so-called “mamadeiras eróticas” (erotic baby bottles) with penis-shaped teats in an supposed bid to fight homophobia.